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Brazilian grains company
Fiagril Participações SA sold a controlling stake to China’s
Hunan Dakang Pasture Farming Co Ltd, a unit of
Shanghai Pengxin Group Co, the Brazilian company said on Friday.

Two sources with direct knowledge of the deal said the
Chinese firm bought a 57 percent stake in family-owned Fiagril,
the latest move by Chinese agricultural merchants seeking to
secure future supply of food in Brazil.

The first source, who requested anonymity because terms of
the deal remain private, said the value of the deal could be
around 1 billion reais ($290 million). The second source said
that current management will be kept in place.

Fiagril released a statement but it gave few details.

Under terms of the deal, Pengxin will provide fresh
financing to Fiagril through working capital loans, the first
source said.

Fiagril Chairman Marino Franz said in the statement the
company will be able to grow after the agreement. Fiagril, which
has grains trading and processing operations, is based in Lucas
do Rio Verde in Mato Grosso state, in the heart of Brazil’s
center-west grain belt.

Fiagril negotiates the purchase of soybeans and corn
directly with farmers, to whom the company also supplies
fertilizers and pesticides.

The deal will exclude Fiagril’s shipping, biofuels and seed
production businesses.

The Fiagril acquisition marks a further step in recent
efforts by Chinese merchants to get a grip on Brazil’s thriving
grains production and export market.

Flush with cash, Chinese firms including China National
Cereals, Oils and Foodstuffs Corp, or Cofco, are
aggressively wrestling market share from their larger Western
rivals.

Recent transactions include Cofco’s purchase of controlling
stakes in Dutch trader Nidera Holdings BV and Noble Group Ltd’s
agribusiness unit, which gave the Chinese firm access
to sugar mills and grain production platforms in Brazil and
Argentina.

An analysis of shipping data by Thomson Reuters found that
Cofco and Asian peers bought 45 percent of Brazil’s soybean,
corn and soymeal exports last year.